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Lou Cannon: Republican Governors Resist ‘Obamacare’ — and Help Make It a Reality

Despite moves to derail it, the federal health-care law rolls on in states

Republicans are doing their level best to demolish or transform the expensive public health systems that are among the Democrats’ proudest legacies.

In Congress, Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, has proposed converting Medicare into a voucher system for those under 55, changing Medicaid into a block grant, and repealing the Patient Protection and Affordable Care Act passed last year by Congress along partisan lines and signed into law by President Barack Obama. This measure, known to Republicans as “Obamacare,” has been under fire since before the ink was dry on the legislation at the signing ceremony.

Several Republican state attorneys general immediately went to federal court with a claim that the provision of the law requiring individuals to purchase health insurance is unconstitutional. They have won two and lost three lawsuits, setting the stage for resolution by the U.S. Supreme Court. Obamacare is also under fire in 40 state legislatures, where 160 measures were introduced this year opposing the federal health law or providing alternatives to it. When the White House celebrated the passage of health-care reform law on March 23, opponents hoped that this first anniversary of the law would also be its last.

That’s unlikely.

Earlier this year the Senate swiftly rejected a House bill that would have repealed the law. And although Republican governors continue to bash Obamacare, the majority of them have joined their Democratic counterparts in accepting federal funds to implement the central feature of the law: the exchanges or marketplaces that, beginning in 2014, will provide health insurance for some 30 million uninsured Americans.

In the state legislatures, the most substantive alternatives to the federal law have been watered down. Missouri and South Dakota (HCR 1004) passed nonbinding resolutions opposing elements of the law. Tennessee approved a bill saying that individuals can’t be required to purchase insurance.

Neither time nor public opinion is on the side of the Republicans. While the ACA has never been wildly popular except in the imagination of the White House, a majority of Americans oppose repeal of the law now that it is on the books. An average of seven national polls through April 2 compiled by RealClearPolitics shows 52.4 percent of respondents opposed to repeal and 39.2 percent in favor.

Nor has the Obama administration stood still in building support at the state level. As Health and Human Services Secretary Kathleen Sebelius has happily observed, 48 states have accepted at least $1 million each from the federal government to help plan for the insurance exchanges. Sebelius has proven adept at enticing state governments to compete for federal favors. In February, she announced grants totaling $241 million to six “early innovator” states and a multistate consortium led by the University of Massachusetts Medical School for development of the technology infrastructure needed to operate the exchanges.

This understandably worries Republicans opposed to the ACA. Indiana Gov. Mitch Daniels has warned that the federal government is now so much in the driver’s seat on health care that it only needs to “play good defense” to prevail. Speaking to the 2011 Conservative Political Action Conference earlier this year, Daniels predicted: “The health-care travesty now on the books will engulf private markets and produce a single-payer system or its equivalent, and it won’t take long to happen.”

Conservatives differ over the strategies and tactics they should use to slow the federal leviathan. Writing in the conservative magazine National Review, Michael F. Cannon (no relation) of the Cato Institute chided Republican governors for accepting federal funds to set up the exchanges. He declared that if the exchanges go into effect as scheduled in 2014, millions of newly insured Americans will have vested interests in preserving the federal law, as will the insurance companies that write their policies.

Cannon praised Republican Govs. Rick Scott of Florida and Sean Parnell of Alaska for refusing to set up the exchanges with either state or federal money. They have since been joined by Georgia Gov. Nathan Deal, who backed down on plans to set up a state exchange after a legislative revolt led by Tea Party activists. The fate of an exchange is up in the air in Oklahoma where the Legislature has balked at a proposal from Gov. Mary Fallin. In New Mexico, the Legislature favors an exchange but Gov. Susana Martinez vetoed a bill that would have established one.

With these five exceptions and that of Democratic Gov. Brian Schweitzer in Montana, most governors are moving to implement state exchanges. Unless they do so or join with other states in establishing regional marketplaces, the uninsured would be enrolled in a federal exchange in which the governors would have no say. Economist John Cogan of the Hoover Institution, a foe of the ACA and co-author of a book, Healthy, Wealthy and Wise, which offers alternatives, says it is nonetheless “prudent” for governors to implement the federal law and preserve the greater flexibility they would have with a state exchange.

Even outspoken conservative Republican Gov. Sam Brownback of Kansas, who voted against the ACA as a U.S. senator, took a $32 million federal grant to implement a state exchange. Wisconsin Gov. Scott Walker, a hero to conservatives in the battles over pension reform and collective bargaining, accepted a $38 million federal grant to start up a state exchange.

As a practical matter, ACA is probably here to stay unless invalidated by the Supreme Court. To repeal the law, Republicans would have to win the White House and both houses of Congress in 2012. Even with this uncertain outcome, Stanford University political scientist Tammy Frisby doubts Republicans would be able to muster the votes for repeal when the nation’s uninsured would be anticipating coverage. The last time Republicans controlled both the White House and Congress they produced an unfunded drug prescription program for seniors that made Medicare financing more precarious and the budget deficit worse.

Ryan may have given Republicans more backbone this time, but he has also created the potential of voter backlash.

“Polling is very clear,” political analyst Charlie Cook wrote recently. “Most voters want to see the federal budget balanced and spending cut. However, they don’t want Social Security, Medicare or Medicaid touched and, oh, yes, they don’t want taxes increased.”

Cook went on to acknowledge that it is impossible to balance the budget without cutting these three programs that, together with interest on the national debt, account for roughly half of federal spending.

But until the day arrives, as it someday must, when the debt crisis persuades Americans to accept substantive cuts in their pet programs or tax increases, reforms can be made at the margins. In this context Republican resistance to the federal health law may have produced useful byproducts. For starters, the Republican counter-attack has induced the Obama administration to offer a variety of concessions, including Obama’s declaration to the National Governors Association that he is open to allowing states to launch single-payer systems and opt out of the federal bill by 2014 instead of 2017, as the law allows. There is also the matter of waivers. States and private companies have flooded the HHS with requests for exceptions to the federal law. Fast-food giant McDonalds, for instance, has asked to keep a no-frills health care plan that does not meet the coverage standards of the federal bill but is popular with workers because of its low cost.

Meanwhile, states seek flexibility in Medicaid, the federal-state program that provides health services for the poor. Medicaid, in which 68 million Americans were enrolled at some point in 2010, has become a huge financial burden for states still struggling to balance their budgets with revenues that have yet to reach pre-recession levels. Low-income Americans presently are eligible for Medicaid if they are parents of minors, children, have a disability or are elderly. But under the ACA, low-income persons outside these categories, notably single adults, will become eligible for Medicaid in 2014. Cogan points out that states have financial incentives to create insurance exchanges that will siphon off these potential Medicaid enrollees into the yet-to-be-created exchanges where people will purchase health insurance.

The devil, as always, is in the details. Will the federal government allow state exchanges to sell policies with higher deductibles and leaner coverage than the ACA envisions? Will the exchanges produce needed competition among insurance companies and keep policy costs low? How many current Medicaid enrollees can be shifted to the new exchanges and required to pay for their insurance?

The answers depend on many factors, including the extent of the economic recovery, the flexibility of the next president and the creativity of the nation’s HHS secretary. All we can presently say with confidence is that it makes sense for state governors and legislators who oppose the ACA to take what control they can of their own destiny. State or regional exchanges are preferable to the alternative of leaving all decisions to Washington.

— Summerland resident Lou Cannon is a longtime national political writer and acclaimed presidential biographer. His most recent book — co-authored with his son, Carl — is Reagan’s Disciple: George W. Bush’s Troubled Quest for a Presidential Legacy. Cannon also is an editorial adviser to State Net Capitol Journal, which published this column originally.

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